Futures & Commodities

Gold dips on US data, ends at lowest level since Feb

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Gold ended its lowest level in about 3-1/2 months on Tuesday after strong U.S. data lifted optimism about the economy, while platinum fell after South Africa's mining minister pledged to mediate in a long-running strike.

U.S. consumer confidence rose in line with expectations, with the Conference Board index at 83 in May from a downwardly revised 81.7 in April, as consumers saw the economy, including the labor market, in a better light.

Separately, the Commerce Department said durable goods orders increased 0.8 percent as demand for defense capital goods surged.

Chart: Precious Metals

U.S. gold futures for June delivery settled 2 percent lower at $1,265.50 an ounce, its lowest close since February 7.

Spot gold, meanwhile, fell 2 percent to its lowest since Feb. 10 at $1,265.76 an ounce in earlier trade and was down 1.9 percent at $1,267 an ounce, heading for its worst daily loss in two months.

Equity markets were firmer, eroding gold's appeal as a hedge against riskier assets, while the dollar cut its losses after the data.

Gold has struggled to break consistently above the $1,300-per-ounce level for the past two weeks, indicating a lack of conviction by investors and speculators, analysts said.

Developments in Ukraine, where air strikes and a paratrooper assault were launched against pro-Russian rebels who seized an airport on Monday, had little impact on gold, which is usually bought as an insurance against risk in times of global political uncertainty.

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Market players were also eyeing developments in physical markets which have been subdued over the past several weeks.

China's gold imports from main conduit Hong Kong fell to a 14-month low of 67.040 tons in April from 85.128 tons in March, as a weaker yuan and local discounts curbed demand.

China has approached foreign banks and gold producers to participate in a global gold exchange in Shanghai, as the world's top producer and importer of the metal seeks greater influence over pricing.

In No. 2 consumer India, investors are hoping the new government would relax rules imposed on gold imports last year, a move they believe will spur pent-up demand.

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